Taking security

Welcome to Francis Wilks & Jones, one of the country’s leading advisers on matters relating to security including taking security. We regularly advise borrowers and funders in all aspects of taking security. Please contact us now on 020 7841 0390 for your free and friendly initial consultation.

1. Taking Security

When providing a business loan, a funder / financier may lend on either an “unsecured” or a “secured” basis. Often a financier will want to lend money on a secured basis – meaning that they will want some form of security (or financial back up) in the event the business fails to pay what is owed under the terms of the business loan.  Security can take many forms, from a debenture over the business, to personal security from individuals – such as the giving of a personal guarantee, indemnity or a charge over a house or other property / shares

For a borrower in particular it is vital to understand what the taking of security means and to ensure that proper advice is taken to ensure that the business, its owners and any third parties giving security understand what is being asked of them. 
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2. Secured Lending - Legal Options

There are various business loan security types and lenders should decide which is most suitable for them to take and also whether the borrower will be willing to agree to this form of security. 
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3. Business to Business Lending Regulation

Entities which lend money to businesses are not required to be regulated.  This means that they are not governed by the Financial Conduct Authority (FCA) and the associated transparency rules with rights of redress.  This has been an ongoing concern, especially for small to medium sized businesses (SMEs) which are the main users of business loans.
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4. Can a Secured Loan be Written Off?

We are often asked “Can a Secured Loan be Written off”. The law surrounding writing off secured loans is very complicated and you should seek legal advice at the earliest opportunity to ensure that you are aware of the options available to you.
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5. Why is Collateral Important to a Borrower?

Collateral or “security” is important to a borrower as it is likely to open up more funding options and may provide a more favourable interest rate or payment terms. The taking of collateral is very important – both for the lender and the borrower and at Francis Wilks & Jones we have the team of commercial finance lawyers who are about to assist you with any secured lending enquiries you have – including the taking of collateral.  For a borrower is hugely important to understand what it means to take collateral and the effect it can have on the business and individuals if the collateral is “called in”.
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6. Secured Lending Legal – What Every Banker Should Know

From a lender’s perspective there are always key clauses that you would want to see as standard in any secured lending agreement to ensure that you protected in the event of the borrower defaulting.  As a funder you may regularly use your own internal loan agreement templates for transactions but it is essential that these are regularly reviewed – to make sure that they are fit for purpose, fit for the particular transaction and up to date with the latest legal developments. At Francis Wilks & Jones we have the expert team of commercial finance lawyers about to assist you in this area.
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